(Bloomberg) – China sent Asian stocks lower and US futures fell on Thursday after a surge in sovereign bond yields sparked concerns over valuations. Treasures held those losses.
MSCI Inc. ‘s Asia Pacific benchmark suffered its worst loss this week, with China and Hong Kong having the biggest chance of selling. The technology sector has struggled while shares in real estate, finance and energy performed better as part of a global shift to value segments. S&P 500 and Nasdaq 100 futures fell after a slump in the indices took the technological benchmark to a two-month low. European contracts slipped.
Australian bonds tumbled after standard Treasury yields in US trade approached 1.5%. A market gauge of inflation expectations over the next five years has reached its highest level since 2008.
The rise in inflation expectations and long-term borrowing costs raise concerns that the long-term rise in stock markets could be jeopardized. Investors are trying to evaluate the appetite of central banks to buy longer-term bonds to keep financial conditions afloat. The focus falls on Federal Reserve Chairman Jerome Powell’s upcoming comments, after Chicago President Charles Fed said the recent rise in yields reflects economic optimism.
“Inflation is worrying; there is a lot of money in the system and it makes sense to have a fix right now, ‘says Shana Sissel, chief investment officer of Spotlight Asset Group. “And the yields on bonds are the implicit way to intensify the market, as the Fed has made it clear that it does not intend to do so.”
Read: US inflation expectations reach decade high as yields rise
Traders are also assessing data indicating an unequal economic recovery from the depths of the pandemic. The U.S. economy expanded modestly in the first two months of the year, with vaccinations supporting business optimism, according to the Federal Reserve’s Beige Book. Democratic leaders in the Senate are working to support the $ 1.9 billion stimulus bill, which is expected to spur enlargement.
Elsewhere, oil was above $ 61 a barrel as investors awaited the outcome of a critical OPEC + policy meeting later Thursday. Bitcoin traded around $ 50,000.
Some important events to watch this week:
OPEC + meeting on production Thursday. U.S. factory orders, initial unemployment claims and durable goods orders are Thursday. Jerome Powell, chairman of the Federal Reserve, speaks Thursday. The U.S. labor report of February on Friday will provide an update on the speed and direction of the country’s labor market recovery.
These are some of the movements in markets:
Stocks
S&P 500 futures fell 0.5% in London from 06:00. The S&P 500 fell 1.3%. The Nasdaq 100 lost 2.9%. Japan’s Topix index fell 1%. Australia’s S & P / ASX 200 index fell 0.8%. The CSI 300 index lost 2.8%. Euro Stoxx 50 futures fell 0.8%.
Currencies
The yen traded at 107.08 per dollar. The foreign yuan was at 6.4730 per dollar. The Bloomberg Dollar Spot Index has changed little. The euro is trading at $ 1.2060.
Effects
The yield on 10-year treasury was stable at 1.47% after a rise of nine basis points. Australia’s 10-year bond yield rose 10 basis points to 1.77%.
Commodities
West Texas Intermediate crude added 0.6% to $ 61.66 per barrel, and gold was 0.4% higher at about $ 1.77.24 per ounce.
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